A recent report by DHL, a leading logistics company, suggests that globalization is not dead, and is showing remarkable resilience despite recent crises. The report, titled the Global Connectedness Index, examines international flows of trade, capital, information, and people and suggests that they are providing the basis for a “re-globalization” that could reform globalization to make it work better.
According to the report, growth has proven remarkably resilient through recent crises, strongly rebutting the notion that growth has given way to deglobalization. This resilience is providing a basis for re-development, which the report defines as reforming growth to make it work better, expanding its pool of beneficiaries, and better managing its challenges.
Historian Adam Tooze, speaking at the World Economic Forum’s Annual Meeting at Davos in 2023, predicted a “new cocktail of globalization” in the next 10 years. He suggested that developments such as the energy transition are creating new sets of interdependencies that could shape the future of development.
While the report suggests that growth is resilient, it also acknowledges that threats to growth are real. The current “turbulent environment” of geopolitical tensions and other crises is not beneficial to business and policy-making, and tensions between the US and China are a major concern.
The report highlights evidence of a decoupling between the world’s biggest economies, with flows of trade, capital, information, and people between the US and China dropping as a share of each country’s total. This decoupling could have serious implications for global economic growth and stability and could undermine efforts to reform development.
The DHL Global Connectedness Index report offers a detailed analysis of growth trends, providing insight into how develpoment has been evolving over the past few years. The report’s authors highlight that while the pandemic caused significant disruption to the global economy, growth has proved remarkably resilient in the face of this crisis. The report suggests that development could be entering a new phase of “re-globalization,” which involves rethinking the way maturation operates to benefit more people and reduce its negative impacts.
One of the key factors driving this “re-development” is the need to address global challenges, such as climate change, economic inequality, and geopolitical tensions. As the report highlights, these challenges require collective action and cooperation, which is only possible through increased globalization and connectivity. This is why the report argues that “re-globalization” could be the way forward, as it would enable countries and businesses to work together to tackle these challenges and create a more sustainable and equitable global economy.
Another important trend highlighted in the report is the growing importance of digital connectivity. The pandemic has accelerated the shift towards digitalization, with many businesses and individuals relying on digital technologies to stay connected and maintain economic activity. As a result, digital flows of trade, capital, and information have become increasingly important, and are likely to remain so in the future.
The report also emphasizes the importance of inclusive growth, which benefits all countries and people, not just the wealthiest and most powerful. Inclusive growth requires policies that promote fair trade, investment in education and infrastructure, and measures to reduce inequality and poverty.
Overall, the DHL Global Connectedness Index report provides a nuanced and detailed analysis of globalization trends, highlighting both the resilience of globalization and the need to reform it to make it work better for more people. The report’s findings suggest that there is still a role for globalization in shaping the future of the global economy, but this will require careful management and cooperation between countries and businesses.
One key challenge that needs to be addressed is the rising trend of economic nationalism, which threatens to undermine globalization by reducing cross-border flows of trade, capital, and people. This trend has been driven by a variety of factors, including concerns about job losses and wage stagnation, as well as rising geopolitical tensions and the pandemic.
To address these challenges, the report recommends that policymakers and businesses work together to create a more inclusive and sustainable form of globalization. This could involve measures such as increased investment in education and infrastructure, policies to promote fair trade and reduce inequality, and initiatives to address climate change and other global challenges.
The DHL Global Connectedness Index report offers a valuable perspective on the state of globalization in the current environment. While there are challenges and risks associated with globalization, the report suggests that there is still a role for globalization in shaping the future of the global economy. By embracing a more inclusive and sustainable form of globalization, policymakers and businesses can work together to create a more prosperous and equitable future for all.